Market Snapshot for session ending 9-21-11:
|
Last |
Day Change |
%Change | |
|
S&P 500 Index |
1166.76 |
-35.33 |
-2.94% |
|
Dow Jones Industrials Average |
11124.84 |
-283.82 |
-2.49% |
|
NASDAQ Composite Index |
2538.19 |
-52.05 |
-2.01% |
|
Value Line Arithmetic Index |
2469.90 |
-88.96 |
-3.48% |
|
Minor Cycle |
Intermediate Cycle |
Major Cycle |
Market Overview – What We Know:
- Losses Wednesday pushed S&P 500 and S&P Emini prices lower and into vicinity of lower edge of 10-Day Price Channels at 1163.76 and 1151.57, respectively.
- At same time rising uptrend lines in effect since August lows were last plotted at 1147--S&P 500 and 1135--S&P Emini.
- Wednesday’s trading volume in S&P 500 rose by nearly 25%.
- Next level of S&P 500 minor resistance holds at August 31 intraday high (1230.71--S&P 500).
- S&P short-term Momentum remains slightly negative while our two proprietary Trading Oscillators remain positive, but fading.
- Cumulative Volume in Cash S&P and S&P Emini is poised to break uptrend lines in both issues.
- Rally in effect since August lows continues to have appearance of reflex rally in larger Intermediate Cycle negative.
- Minor resistance holds at August 31 intraday high (1230.71—S&P) with Major resistance holding at 1255-1270—S&P 500).
- CPFL was net negative Wednesday by 3.40 to 1.
- Daily MAAD was negative Wednesday with 1 advance and 19 declines.
Market Overview – What We Think:
- Time is simply running out on short-term advance that has been underway for past six weeks and since August price lows in major indexes.
- While we cannot rule out possibility of further gains so long as short-term uptrends remain intact, the odds of such and occurrence developing are growing slimmer by the day. In fact, it would not take much selling from current levels to create new indicator and price lows.
- Any weakness in S&P below lower edge of defined and rising short-term trend line last plotted at 1147 (Thursday) would likely suggest an end to reflex rally in effect since early August lows.
- We continue to think price action since August lows is consistent with bear move reflex rally on Minor Cycle.
- Even if more strength developed, it is highly unlikely major resistance at “Neckline” level of S&P 500 (1255-1270) will be seriously challenged before short-term trend reverses to negative.
- If more weakness develops in earnest, its likely Momentum on long-term trend will turn negative to confirm a reversal of larger bull move in effect since March 2009.
Click charts to enlarge
Next page: Indicator review
We are also updating the daily chart of both the Call/Put Dollar Value Flow Line (CPFL) and Most Actives Advance/Decline Line (MAAD) indicators every day and providing the most recent raw data so you can begin to plot the indicators on your own (see below). The weekly equity index indicator summary provides longer-term commentary based on these indicators.
The definitions of the indicators along with links to the original stories provide helpful background. Also, Robert describes these indicators in a recent I-Trade show presentation available online.
Click charts to enlarge
*Note: Unchanged issues are not counted.
Robert McCurtain is a technical analyst/market timer, private investor and financial markets consultant based in New York City. He is a member of the Market Technicians Association and can be reached at traderbob@nyc.rr.com.
If you would like to read more about how the CPFL is constructed, read a Futures article on the concept. This link will take you to the MAAD article.
